As the U.S. under President Trump intensifies its tariff agenda, Germany and Ireland are emerging as the most vulnerable EU economies. Washington's recent 25% tariffs on automobiles already threaten Germany’s key export sector, with potential long-term losses of 0.4% of GDP, according to Brussels-based think tank Bruegel.
Ireland, while less exposed in the auto sector, faces significant risk if proposed pharmaceutical tariffs, possibly up to 200%, materialize. Over half of Ireland’s exports are destined for the U.S., with pharma accounting for a dominant share. BCA Research warns that such tariffs could reduce Ireland’s GDP by up to 5% over time.
Overall, 20.6% of EU goods exports go to the U.S., with pharmaceuticals (15%) and autos topping the list. Analysts note that smaller nations such as Denmark, Belgium, and Slovenia are also highly exposed through pharma.
Moody’s and Oxford Economics highlight that EU trade volumes could shrink by 8% over five years due to tariffs, dragging down growth even in less directly affected countries like France and Spain, as uncertainty curtails investment.
While Trump floated a 200% pharma tariff, experts doubt it will be enacted at that level. Instead, the threat is likely a negotiating tactic to push pharma companies to lower prices and shift production to U.S. soil.
The EU is working to secure a new trade deal, but in the meantime, the bloc braces for a potentially uneven and costly fallout.
